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World Bank Sees Oil Prices At $56 Per Barrel Next Year

World Bank Sees Oil Prices At $56 Per Barrel Next Year

Oil prices will edge up to $56 a barrel next year from this year’s $53 a barrel level on rising demand, continued production cuts from producers and stabilizing US shale output, the World Bank said.
“Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts,” said John Baffes, senior economist and lead author of the October Commodity Markets Outlook, Zawya reported.
The oil price forecast is, however, a small downward revision from the bank’s earlier outlook report issued in April.
There is a possibility that output cuts, agreed by members of the Organization of Petroleum Exporting Countries and other non-OPEC states such as Russia, may be extended beyond the March 2018 deadline. Oil output has been curbed by about 1.8 million barrels per day since January.
Oil prices rose about 2% on Friday on the world market, with the bellwether Brent breaching $60 per barrel for the first time since 2015, after top producers Saudi Arabia and Russia declared support for supplies to be cut for another nine months.
An agreement to extend production limits should maintain an upward pressure on prices, the World Bank said.
US shale producers, meanwhile, have pumped 6.12 million barrels a day for the past five months and output is expected to rise for an 11th straight month in November.
Output at the vast Permian shale field is expected to rise to 2.7 million barrels a day by the end of the year, from 2.2 million barrels a day at the beginning of 2017 and to 3.3 million barrels a day by the end of 2018.
Permian and Eagle Ford are the two biggest shale oil basins in the US, delivering about two-thirds of the country’s shale oil production.